Rental reform is incentive-based not punitive, Joseph Muscat tells businesspeople

Prime Minister addresses members of the Malta Chamber of Commerce, Enterprise and Industry

Government announced its rent reform plans, which will be debated in Parliament shortly
Government announced its rent reform plans, which will be debated in Parliament shortly

The main problem with the rental market, which became apparent after a year-long consultation with stakeholders, was that the relationship between landlords and tenants was not formalised or regulated, and could change overnight, the Prime Minister said.

Joseph Muscat said that the first thing the government did through the rent reform proposed yesterday was to introduce a stronger element of certainty when it comes to renting.

Muscat said the government had decided to avoid adopting a punitive approach and instead encourage longer-term agreements through incentives.

The Prime Minister was speaking during a dialogue meeting with Malta Chamber of Commerce delegates on Thursday, where he spoke about the main issue facing the economy, including the rent reform and the establishment of Malta Air.

“The first major change that our economy and households will face [following the rent reform] is that there will be more certainty, where the minimum duration of a contract has to be one year,” he said.

“The second decision was not to adopt a punitive approach towards encouraging longer-term rent agreements,” he highlighted.

“We could have gone in the direction of the highly regulated Berlin rent market. But instead, we asked whether it was feasible to go from a situation of having absolutely no caps to modelling ourselves on one of the most tightly regulated rental markets in Europe. Instead, we decided to go for an incentive-driven approach to encourage longer-term contracts.”

Government opted to be receptive to Ryanair's interest in working with Maltese government to set up Malta Air
Government opted to be receptive to Ryanair's interest in working with Maltese government to set up Malta Air

‘Nothing could have stopped Ryanair establishing an airline in Malta’

Muscat said that, given that Malta operated within the context of European Union rules, nothing could have prevented Ryanair from applying for an air operator’s certificate and setting up an airline in Malta, even if this wasn’t done in agreement with the government.

However, the government had opted to be receptive to Ryanair’s interest in working with the Maltese government and had set up Malta Air through mutual agreement.

“We went for a model whereby we recognised they [Ryanair] wanted to work for us and we wanted to work with them,” he said.

Muscat insisted that Air Malta and Malta Air had different business models and served different markets. “People who look at an Air Malta flight have already decided to come to Malta,” he underscored.

“On the other hand, people visit the Ryanair website because they want to go on holiday anywhere in Europe, but they will decide where to go later.”

“The markets, therefore, are different. And everyone should understand that the work we have done will lead to an exponential growth in visits to our country and to a totally new level of engagement with the aviation industry,” he added.

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